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The term was derived from the Declaration for the Establishment of a New International Economic Order, adopted by the United Nations General Assembly in 1974, and referred to a wide range of trade, financial, commodity, and debt-related issues (1 May 1974, A/RES/S-6/3201).[1] This followed an agenda for discussions between industrial and developing countries, focusing on restructuring of the world's economy to permit greater participation by and benefits to developing countries (also known as the "North-South Dialogue"). Along with the declaration, a Programme of Action and a Charter of Economic Rights and Duties of States (12 December 1974, A/RES/29/3281).[2] were also adopted.

In the 1970s and 1980s, the developing countries pushed for NIEO and an accompanying set of documents to be adopted by the UN General Assembly. Subsequently, however, these norms became only of rhetorical and political value, except for some partly viable mechanisms, such as the non-legal, non-bindingRestrictive Business Practice Code adopted in 1980 and the Common Fund for Commodities which came in force in 1989.

They must be free to set up associations of primary commodities producers similar to the OPEC; all other States must recognize this right and refrain from taking economic, military, or political measures calculated to restrict it.

A number of social mechanisms are possible to affect resource allocation in any economic order. An authoritative allocation mechanism involves direct control of resources while, at the other end of the spectrum, more market-oriented private allocation mechanisms are possible. Most of the debates within the NIEO occurred over allocation mechanisms, with the southern hemisphere countries favoring authoritative solutions.

NIEO proposes central planning, as opposed to free markets.[3] It is based on the (French) mercantilist idea that international trade would be a zero-sum game (i.e., causes no net benefits), and on the view that it does not benefit the rich at the expense of the poor. Some American economists challenge the idea of trade as a zero-sum game transaction.[4]

Virtually no part of the New International Economic Order was implemented. Instead, from the 1980s onward, the Bretton Woods framework would be replaced with the Washington Consensus and economic globalization on terms often described as neoliberal. The economic reach of multinational corporations, rather than being circumscribed, would be expanded significantly. Trade in commodities would shift away from state-dominated cartels towards increasingly financialized markets. The NIEO's emphasis on central planning and state-oriented resource allocation mechanisms would be almost wholly rejected, even amongst the (former) Socialist bloc, in favor of economic liberalization. The formation of the World Trade Organization and the proliferation of free trade agreements would compel the reduction of barriers to trade, generally on strictly reciprocal terms.

In Matsushita et al.'s World Trade Organization, the authors explained part of the legacy of the NIEO:

... tensions and disagreements between developed and developing countries continue: the latter expect a greater degree of special treatment than industrialized countries have afforded them. This demand was expressed comprehensively in the New International Economic Order and the Charter of Economic Rights and Duties of States promoted by UNCTAD in the 1970s. Although the Charter was never accepted by developing [sic] countries and is now dead, the political, economic, and social concerns that inspired it are still present. The Charter called for restitution for the economic and social costs of colonialism, racial discrimination, and foreign domination. It would have imposed a duty on all states to adjust the prices of exports to their imports. The realization of the New International Economic Order was an impetus for developing country support for the Tokyo Round of trade negotiations. Critics of the WTO continue to state that little of substance for developing countries came out of either the Tokyo or Uruguay Rounds.

The NIEO can be considered to have something of a spiritual successor in the alter-globalization movement, which, like the NIEO, owes much to French academic criticism (generally rooted in Marxist economics) of international trade.[5]

The powerful countries of North America and Western Europe felt threatened by the NIEO and continuously tried to criticize and minimize it; according to economist Professor Harry Johnson, the most efficient way to help the poor is to transfer resources from those most able to pay to those most in need. Instead of this, NIEO proposes that those poor countries that have monopoly power should be able to extort these transfers. In practice such power has caused most harm to other poor countries.[6]

Commanding prices above their natural level usually reduces consumption and thus causes unemployment among producers. Moreover, price regulation typically gives the extra income to those in control of who is allowed to produce, e.g., to governments or land-owners.[7]

Rothstein, Robert L. (1979) Global Bargaining: UNCTAD and the Quest for a New International Economic Order Princeton: Princeton University Press. (Traces formation of UNCTAD and its role in the NIEO.) ISBN0-691-02190-2

The Darker Nations: A People's History of the Third World by Vijay Prashad and Howard Zinn (Editor) A "people's history" of the world's impoverished countries and their failures to oppose the United States and Soviet spheres of economic influence following World War II to the present. ISBN1-56584-785-7